Fratessa v. Morrissey

BEASLY, J.,

pro

tem.

This action was brought to restrain defendants, who claimed to be director-trustees of a defunct corporation, from selling certain real estate for the purpose of winding up the corporation’s affairs.

From the facts it appears that the Anvil Land & Stock Company, a domestic corporation, forfeited its charter for failure to pay its annual license tax. At the time of the forfeiture the corporation’s assets consisted of three parcels of land situated in San Francisco of the value of three thousand five hundred dollars, and one parcel in the state of Oregon. The corporation was not indebted in any sum, and the defendants herein were its directors in office and its only stockholders at the time of the forfeiture of its charter. Subsequent to this forfeiture the defendants conveyed all the corporate shares to one Harvey F. Turner, who thereafter conveyed the same to the plaintiff. After having disposed of all their interest in the corporation defendants signified their intention as director-trustees of selling the four parcels of land for the purpose of winding up the corporation’s affairs. Plaintiff thereupon filed his complaint reciting the above-mentioned matters, and claiming that there was no necessity for the sale. In his complaint plaintiff alleged an offer to pay any reasonable expense for settling the corporation’s affairs, and for distributing and conveying the assets of the corporation to him as owner of all the shares of the capital stock of the corporation. He

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alleged further that the defendants demanded the unreasonable sum of $350 for their compensation as trustees to make such distribution to plaintiff, and threatened a sale of the real property to pay themselves such sum. The complaint prayed for a judgment restraining the defendants from selling the lands, and for an order directing a conveyance of the same to plaintiff.

Defendants answered, a temporary restraining order was made, trial was had and the cause was submitted for decision. Pending the decision, an act enabling defunct corporations to have their charters restored was passed by the legislature; the corporation was rehabilitated, though not by defendants ; shares of stock were transferred by plaintiff to other persons; the stockholders of the revived corporation held a meeting and removed defendants from office as directors, and elected others in their stead. Thereafter the corporation through its new directors sold the four parcels of land to plaintiff.